Introduction
India is rapidly adopting renewable energy, particularly solar power, to meet its growing electricity demand while reducing carbon emissions. The Government of India set an ambitious renewable energy capacity target 500 giga watt (GW) of renewable energy capacity by 2030.
The adoption of rooftop solar has been driven by high retail electricity tariffs for commercial and industrial (C&I) consumers, favorable net metering policies, corporate social responsibility (CSR) programs, and growing consumer awareness.
Two primary billing systems—net metering and gross metering—determine how solar energy producers are credited for the electricity they feed into the grid. Understanding these systems is crucial for consumers, businesses, and policymakers.
What is Net Metering?
Net metering is a billing arrangement where consumers with rooftop solar panels can offset their electricity consumption by exporting excess solar power to the grid.
How Net Metering Works:
- Bi-directional Metering: A single meter records both electricity consumed from the grid and excess solar power fed back into it.
- Energy Offset: At the end of the billing cycle, the consumer is billed only for the net energy consumed (grid electricity used minus solar energy exported).
- Credit System: If solar generation exceeds consumption, the surplus is either:
- Carried forward as a credit for future bills (in most states).
- Compensated at a lower rate (e.g., Average Power Purchase Cost (APPC), typically around ₹4/kWh).
Example of Net Metering Billing:
| Month | Grid Consumption (kWh) | Solar Export (kWh) | Net Billed (kWh) | Payment (₹9/kWh) |
|---|---|---|---|---|
| Dec | 800 | 800 | 0 | ₹0 |
| Jan | 1000 | 1200 | -200 (Credit) | DISCOM pays ₹800 (200 × ₹4) |
| Feb | 1300 | 900 | 400 | Consumer pays ₹3600 (400 × ₹9) |
Advantages of Net Metering:
✅ Lower Electricity Bills – Directly offsets consumption, reducing dependence on costly grid power.
✅ Better ROI on Solar Investments – Faster payback due to higher savings.
✅ Simple & Widely Adopted – Preferred by residential and commercial users.
Disadvantages of Net Metering:
❌ Limited Compensation for Excess Solar – Some states pay very low or no feed-in tariffs for surplus power.
❌ State-Specific Policies – Rules vary, leading to inconsistency across regions.
What is Gross Metering?
Gross metering is a system where all solar power generated is fed into the grid, and the consumer purchases all electricity from the grid separately.
How Gross Metering Works:
- Two Separate Meters:
- One records total solar energy exported (compensated at Feed-in Tariff (FiT)).
- Another records total electricity imported (billed at retail tariff).
- No Direct Self-Consumption: Unlike net metering, solar power does not offset personal usage.
Example of Gross Metering Billing:
| Month | Grid Consumption (kWh) | Solar Export (kWh) | Payment for Export (₹4/kWh) | Payment for Import (₹9/kWh) | Net Payment |
|---|---|---|---|---|---|
| Dec | 800 | 800 | ₹3200 (800 × ₹4) | ₹7200 (800 × ₹9) | ₹4000 |
| Jan | 1000 | 1200 | ₹4800 (1200 × ₹4) | ₹9000 (1000 × ₹9) | ₹4200 |
| Feb | 1300 | 900 | ₹3600 (900 × ₹4) | ₹11700 (1300 × ₹9) | ₹8100 |
Advantages of Gross Metering:
✅ Guaranteed Revenue – Fixed FiT for all solar power exported.
✅ Suitable for Large Producers – Ideal for those generating more than they consume.
Disadvantages of Gross Metering:
❌ Higher Electricity Bills – Consumers pay full retail rates for grid power.
❌ Slower ROI – FiT rates are usually lower than retail tariffs.
Key Differences Between Net Metering and Gross Metering
| Feature | Net Metering | Gross Metering |
|---|---|---|
| Meter Type | Single bi-directional meter | Two separate meters (export & import) |
| Billing Mechanism | Net energy (import – export) | Separate billing for import & export |
| Compensation for Solar | Credit offset or low APPC (₹3-4/kWh) | Fixed FiT (₹3-5/kWh) |
| Best For | Homes, SMEs (self-consumption) | Large solar farms (export-focused) |
| Savings Potential | High (direct offset) | Low (depends on FiT vs. retail rate) |
| Adoption in India | 36 states and union territories | 22 states and union territories (alongside net metering) |
Which One is Better for You?
Choose Net Metering If:
✔ You want maximum savings on electricity bills.
✔ Your solar generation matches your consumption.
✔ Your state offers favorable net metering policies (e.g., Gujarat, Tamil Nadu, Kerala).
Choose Gross Metering If:
✔ You generate far more solar power than you consume.
✔ Your state offers a high Feed-in Tariff (FiT).
✔ You are a large-scale producer (e.g., industrial plants).
Conclusion
- Net metering is more financially beneficial for most consumers, as it directly reduces electricity bills by offsetting grid usage.
- Gross metering is better suited for large solar producers who prioritize selling power to the grid rather than self-consumption.
Despite India’s slow progress in rooftop solar adoption (only 14% of solar capacity), net metering remains the preferred choice for residential and commercial users. However, state policies play a crucial role—consumers must check local regulations before investing in solar.
Would you like a state-wise breakdown of net metering policies? Let me know in the comments!
Keywords: Net metering vs gross metering India, rooftop solar policy, feed-in tariff, APPC, solar billing mechanisms, best metering for solar in India.
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